SoCal Biotech TrovaGene's Stock Tanks After Firing CEO, CFO
March 29, 2016
By Mark Terry, BioSpace.com Breaking News Staff
San Diego, Calif.-based TrovaGene announced yesterday that it had fired hits chief executive officer and chief financial officer for cause. The company also filed a lawsuit against both men, Antonius Schuh and Stephen Zaniboni, chief executive officer and chief financial officer, respectively.
The company’s lawsuit alleges that Schuh and Zaniboni did not present a “lucrative corporate opportunity” to the board regarding a new therapeutic, instead apparently keeping it for themselves. The lawsuit demands that they relinquish those interests in the new therapeutics to the company. At this point, no details have been released about the outside business activities of the two men, either in the court filings or in an investors conference call.
Schuh will be replaced by Thomas Adams, the company’s chairman of the board, on an interim basis. At this time, there is no replacement for Zaniboni.
“The acquisition of new therapeutics in the field of precision medicine presents an exciting opportunity for Trovagene and we intend to bring the opportunity to Trovagene where it rightfully belongs for the good of our shareholders,” Adams said in a statement.
Adams has been chairman of Trovagene’s board since 2009. He served as director of IRIS International from 2005 to 2011, and was IRIS’s chief technology officer since April 2006.
Trovagene dropped after the announcement. Shares traded for $13.29 on June 11, 22015, dropped to $5.47 on Aug. 25, popped to $7.29 on Sept. 18, then dropped to $4.31 on Oct. 13. That up-and-down trend continued, hitting $6.98 on Nov. 25, dropping to $2.99 on Jan. 19, 2016, and hitting $6.88 on Mar. 8. Shares are currently trading for $5.11.
Analysts with Avondale Partners published a report today that reiterated a “market perform” rating with a target price of $6. On Mar. 11, Cantor Fitzgerald restated a “buy” rating with a $10 price target. On Feb. 3, Maxim Group repeated a “buy” rating with a price target of $12.
Yesterday eight analysts had a consensus rating of “buy” with two giving it a “hold” and six recommending a “buy.”
Trovagene is a molecular diagnostics company that offers the Trovagene Precision Cancer Monitoring (PCM) platform. It identifies circulating tumor DNA (ctDNA) in urine and blood, detecting BRAF, KRAS and EGFR mutations.
Most recently the company announced it was presenting clinical results from the Precision Cancer Monitoring Platform at the American Association for Cancer Research (AACR) Annual Meeting in April.
Takeo Fujii, of the University of Texas MD Anderson Cancer Center, will present “Circulating Tumor DNA Assay Performance for Detection and Monitoring KRAS Mutations in Urine from Patients with Advanced Cancers” on April 19. The specific cancers studied include colorectal, non-small cell lung, pancreatic, and ovarian cancers.
At a investor conference call this morning, Adams declined to provide details about the actual allegations and lawsuit for legal reasons, but he did say that the terminations, “Bear no impact on the company’s fundamentals or financials. … The company’s prospects remain intact and our strategy and vision remain.”
Adams did indicate that the outside activity was identified via emails a few weeks ago and had engaged attorneys in the area of corporate law and litigation.